Well, if you thought that OPEC production cuts were difficult to put in place, it may be even harder to work out of them. The extremely successful OPEC cuts, along with their co-conspirator Russia, will at some point be scaled back but raising oil production may not be as easy as it seems.
Apparently, President Donald Trump knows what a dictator wants. They want to be treated rough. Instead of being coddled and respected, they want to make sure that the guy they are dealing with is as tough as he is, and only then can you gain his respect, or maybe his fear. Instead of starting a nuclear war, President Trump’s tough talk and harsh sanctions has brought Kim Jong-un to the negotiating table.
Crude oil prices got a scare on reports that Gary Cohn, chief economic advisor to President Donald Trump, is resigning, which raised fears that the world is on the brink of an all-out tariff and trade war. Cohn, the former Goldman Sachs banker, is said to be quitting because of his opposition to the steel and aluminum tariffs that President Trump has threatened to put in place.
You can talk about shale oil and rig counts all you want but you must also talk about oil in storage or the lack thereof. My buddy Matt Smith at Clipper Data points out that Saldanha Bay in South Africa is home to one of the world's largest crude storage facilities, and it has seen its supply almost emptied out.
A potential trade war and Russian meddling, not in an election but to try to influence U.S. energy policies, is all the rage in the financial markets today. U.S. stocks plummeted after President Donald Trump slowed the market with the timing of his announcement that he would impose a 25% tariff on steel imports and 10% on aluminum.